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Auction website eBay urges Congress to not tax small businesses

In testimony to the House Judiciary Committee, eBay, the country’s largest small business auction website, said the government’s attempt to levy a sales tax would kill jobs in the middle of a recession.

At the hearing, eBay said hundreds of thousands of small business entrepreneurs can use their low-cost platform to open a business outside their geographic location. This wildly popular website literally opens a small town business to the world.

“You hear a lot about fairness in this debate. Some have claimed that a ‘level playing field’ means all retailers using the Internet should be held to the same remote sales tax standard,” said Tod Cohen Vice President of Global Government Relations and Deputy General Counsel for eBay Inc. “However, sameness is not fairness. Small businesses retailers face many competitive disadvantages when compared to larger retailers. They have proportionally higher costs of doing business, including providing employee benefits.”

Across the country, small businesses continue to lose ground with large corporations and eBay suggests their business model provides entrepreneurs with an outlet to compete in a global market place.

“Do those who want a ‘level playing field’ demand that all small business retailers get the same tax credits, the same sales tax exclusions and the same shipping rates? If and when they do, we will be the first to endorse changing Quill and lifting the prohibition against remote sales tax collection and remittance,” Cohen explained to Congress.

In an effort to provide Congressional members with an alternative to a straight tax, eBay executives suggested Congress should provide entrepreneurs with a small business exemption.

“Congress has the power to address abuses and inequities without raising new costs on small business retail entrepreneurs,” Cohen said. “A real Small Business Exemption would do that. A real Small Business Exemption would protect small retailers who are already falling behind. Permanently protecting small business retailers from national remote sales tax collection burdens will promote new retail competition.”

EBay also pointed to the Census Bureau and Forrester Research that showed “in-store retail represents 93 percent of all retail in 2012 and only 7 percent represents online retail.” Small eBay businesses argue this small number should exempt them from a remote sales tax.

Small business entrepreneurs said they operate with a razor-thin profit margin and say shipping costs eat at their bottom line. If Washington added a remote sales tax many businesses would be forced to close down, according to eBay.

For these reasons, eBay and many of their users support House Resolution 95, a bi-partisan resolution that opposes new tax collection requirements for small online businesses with a small market share.

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© Copyright 2011 Kimberly Dvorak All Rights Reserved.

Texas snatches 1,000 high-paying eBay jobs from California

On a recent trip to Los Angeles, Texas governor, Rick Perry, met with wealthy business types to boost the number of companies doing business in the Lone Star State. The trip paid off as eBay, formerly run by Meg Whitman, agreed to tax incentives in exchange for relocating to Texas.

The average salary for these “green economy” jobs is $122,500 and they would have made California’s progressive peddlers very happy. Austin City Council members referred to the coup as “green software programming jobs” that will provide sustained economic growth in the state.

The Internet giant eBay says they will employ approximately 1,000 new workers at their new location.

“This is precisely the kind of company we would like to see expand in Austin. This project will include great jobs for Central Texans,” Mayor Lee Leffingwell said.

Gov. Rick Perry’s office claimed the eBay move would bring an estimated $5.1 million in capital investment to the state.

“Austin’s high-tech economy and skilled workforce are perfect for eBay, and I’m pleased to welcome this expansion and the more than 1,000 quality jobs it will bring to Texas,” he said.

By moving to Texas eBay will not only save money they will avoid those pesky regulations that plague California’s business sector.

“Austin is a vibrant, exciting city with a strong heritage for technology expertise and lots of growth potential,” says eBay Vice President Mark Carges. “Our state-of-the-art facility there has room for expansion and the support we have received from the state of Texas and the city of Austin reinforces our commitment to attracting top talent in regions where we operate.”

Currently Texas offers one of the country’s best tax environments for corporations. The state tax burden in Texas is 8.40 percent and in California it’s 10.50 percent. Texas also offers healthy double-digit personnel income growth 67.6 percent versus 56.6 percent in California.

With no personal state income taxes in Texas, eBay should be able to recruit California’s best and brightest minds to relocate in a state looking to expand commerce and provide lucrative jobs for young families.

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© Copyright 2011 Kimberly Dvorak All Rights Reserved.

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